State senators issue warning to insurance commissioner

Commissioner was employed at insurer and concerns are expressed about influence over litigation

State senators issue warning to insurance commissioner

Insurance News

By Allie Sanchez

“[P]lease accept this letter as an expression of our concern regarding your attempt to influence pending legislation in which Cigna, your former employer and your husband’s current employer, has a direct financial interest,” was how the letter by Senators Martin Looney and Len Fasano read concerning Connecticut Insurance Commissioner Katharine Wade’s alleged “interjections” into a proposed anti-price-gouging consumer bill.

Wade was a lobbyist and vice president at Cigna, where she worked for 21 years, while her husband is still currently employed with the firm as a lawyer.

The Hartford Courant also reported Looney and Fasano as saying, “We would have expected you to support legislation that improves public transparency regarding drug prices [and] protects consumers from secret price gouging ... Therefore, we were surprised to learn that you interjected yourself into the legislative process in a manner that would benefit Cigna and other insurers who have affiliated (pharmacy benefit managers).”

Meanwhile, a spokeswoman for the commissioner said that the senators failed to mention that Wade supports the bill’s main provisions and is in favour of enforcing provisions that would protect consumers against price gouging.

Governor Dannel P. Malloy, who named Wade to her current post in 2015, defended the beleaguered commissioner.

“Commissioner Wade was and is appropriately doing her job as a regulator – an excellent, well-regarded one at that,” Malloy was quoted as saying in a statement. “To accuse the commissioner of ‘interjecting’ herself into an open legislative process by offering appropriate language is ridiculous on its face. It’s especially ridiculous given that our administration has been consistently supportive of the underlying bill concept – to imply otherwise is disingenuous at best, and a lie-by-omission at worst.”

“[W]e believe you requested the following language: ‘Each Pharmacy Benefits Manager or health carrier who enter into a contract for pharmacy services with a pharmacy or pharmacist shall be responsible for auditing and enforcing the provisions of this section in their own pharmacy services contracts,’” the senators wrote, adding: “We believe this would be referred to as the ‘fox guarding the hen house.’”

Looney and Fasano further explained in the report that PBM contracts “often also require the pharmacist to collect the full co-pay for a drug even if the drug costs significantly less. For example, a pharmacist may be reimbursed $5 for prescription medicine, such as an antacid, and yet be required by the PBM to collect the full $20 co-pay from the consumer with the difference, or $15, pocketed by the PBM.”

According to the legislators, the proposed law would ban “two fundamentally anti-consumer practices”: “gag clauses” which preclude pharmacists from disclosing relevant price information to consumers; and contractual provisions that “result in consumers unknowingly paying more out of pocket for a prescription drug than the drug actually costs.”

Wade’s spokesperson, the insurance department’s director of communications, Donna Tomelleo, said that the commissioner supports these provisions.

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